ALJDEC decisions subject to certification as final-DONT USE

2023A-05150-RFA-LS-ROC · Registrar of Contractors · 2026-07-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

«Matter Notes»

No. «Matter Matter ID»

ADMINISTRATIVE LAW

JUDGE DECISION

HEARING: June 19, 2026

APPEARANCES: Assistant Attorney General Charles S. Hover III represented the Registrar of Contractors with witness Lauren Johnston. Complainant Sam Gordon appeared on his own behalf. Garry McCray appeared and testified on behalf of Respondent.

ADMINISTRATIVE LAW JUDGE: Fahd Nazir

EXHIBITS ADMITTED INTO EVIDENCE: Administrative notice was taken of Exhibits 1 through 15 submitted by the Registrar of Contractors.

FINDINGS OF FACT

Background and Procedure

The Arizona Registrar of Contractors (Registrar or ROC) issued License No. 182801 to A to Z Drilling & Pump Service LLC (Respondent).

On September 7, 2021, Sam Gordon (Complainant) entered into a contract with Respondent for a new well.

On or about September 8, 2021, the Registrar received a Complaint against Respondent from Complainant alleging abandonment with respect to the project (the Workmanship Complaint).

On May 23, 2023, Investigator Miles Crosby conducted a jobsite inspection, at which Respondent was not present. Thereafter, a Written Directive was issued to Respondent that provided as follows:

After investigation, the Registrar determined that you failed to meet the requirements of A.R.S. § 32-1154(A), and now issues this Directive requiring you to take appropriate corrective action. Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A)(22) and may result in the issuance of a citation, discipline of your license, and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. You must notify

the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on June 17, 2023.

DIRECTIVE REQUIREMENTS

You are directed to remedy the following violations by the appropriate means:

Compliance Item: 1 - Well has not completed (see narrative).

Investigator’s Observation: I observed the well to be in progress. The Respondent has verified that he knows the well has not been completed but has not returned to finish the job. Respondent should correct by appropriate means. . . .

After the deadline in the Written Directive expired and Complainant performed no work, the Registrar issued a Citation against Respondent charging possible violations of Ariz. Rev. Stat. § 32-1154(A)(1); Ariz. Rev. Stat. § 32-1154(A)(3), namely Ariz. Admin. Code R4-9-108(A); Ariz. Rev. Stat. § 32-1154(A)(12), namely Ariz. Rev. Stat. § 32-1158; Ariz. Rev. Stat. § 32-1154(A)(12), namely Ariz. Rev. Stat. § 32-1124(B); and Ariz. Rev. Stat. § 32-1154(A)(22).

An administrative hearing was held on February 27, 2024, at which Respondent was not present. In the Decision, Administrative Law Judge (ALJ) Amy M. Haley considered Complainant’s arguments and concluded that Respondent failed to comply with the Registrar’s statute in violation of Ariz. Rev. Stat. § 32-1154(A)(1); Ariz. Rev. Stat. § 32-1154(A)(3), namely Ariz. Admin. Code R4-9-108(A); Ariz. Rev. Stat. § 32-1154(A)(12), namely Ariz. Rev. Stat. § 32-1158; Ariz. Rev. Stat. § 32-1154(A)(12), namely Ariz. Rev. Stat. § 32-1124(B); and Ariz. Rev. Stat. § 32-1154(A)(22).

On April 1, 2024, the Registrar issued a Final Administrative Decision and Order affirming the violations and imposing a $500.00 civil penalty.

On February 23, 2026, Complainant filed a claim with the Residential Contractors’ Recovery Fund (the Fund) to recover the cost of completing or repairing the project. As part of the claim process, Complainant submitted bids from two different licensed contractors that he had obtained to finish the project. The bids were detailed as follows:

Bid #1 from Casner Drilling & Pump in the total amount of $58,200.81.

Bid #2 from KP Ventures Drilling & Pump in the total amount of $100,265.34.

The Registrar assigned Legal Assistant Ms. Lauren Johnston to investigate Complainant’s eligibility. She reviewed the Special Warranty Deed (Property Deed), the living trust document, and Complainant’s claim against Respondent’s bond. Ms. Johnston emailed Investigator Crosby on March 31, 2026, asking for his opinion about the two bids Complainant submitted. Particularly, she asked, “Does [Bid #1] appear reasonable and in line with your written directive?”. Investigator Crosby replied, “Sorry about that. Yes. The Respondents well rig broke down and they never came back and abandoned the rig on [site] due to the well caving. An entire new well will have to be started.”

On April 15, 2026, given Investigator Crosby’s feedback, review of the original contract between the parties, and payments affidavit, Ms. Johnston issued a Notice of Administrative Award, finding that Complainant’s actual damages were $30,000.00, which was calculated using Compensable Bid Amount of $58,200.81, from Bid #1 estimate.

On April 29, 2026, Respondent requested a hearing, believing Complainant did not meet eligibility requirements for the Fund and that the award amount was excessive. Respondent’s appeal also challenged the contractual obligations owed to Complainant.

The Registrar referred the matter to the Office of Administrative Hearings (OAH), an independent state agency, for an evidentiary hearing. A hearing was held on June 19, 2026.

Hearing Evidence

Ms. Johnston testified that she reviewed the Complaint, Written Directive, the Property Deed, the Administrative Law Judge Decision regarding the underlying Complaint, the parties’ contract, the payments made by Complainant, the letter from Respondent’s bonding company, and bids submitted by Complainant for repair/completion of the project, in determining that Complainant was eligible to file a claim with the Fund and in calculating Complainant’s actual damages.

Regarding the living trust, Ms. Johnston added that a living trust meets the requirements because it is revocable and alterable, and accordingly Complainant was eligible to file a claim with the Fund. In addition, Ms. Johnston specified that Complainant also provided an Affidavit of Residence and Intent for Property document, thereby confirming that it was his primary residence, as required under Arizona law.

Ms. Johnston stated that Respondent was not in compliance with the Written Directive. She testified that she consulted with Investigator Crosby prior to concluding that Bid #1 was the most accurate estimate of outstanding repair/completion work. And that it was their “joint opinion” that a new well had to be constructed.

Ms. Johnston added that her calculation of actual damages took into account the total contract price and the unpaid balance, as well as any payments made to Respondent by Complainant. She calculated Complainant’s actual damages by subtracting the amount Complainant still owed towards the parties’ contract ($8,558.00) from the amount deemed necessary to repair/complete the project per Bid #1 ($58,200.81) and arrived at the amount of $49,642.81, with compensable damages limited by statute to $30,000.00.

Mr. Gordon agreed with Ms. Johnston’s testimony. During cross-examination, when asked about the original contract and the Workmanship Complaint, he said, “it does not matter, it has been adjudicated.”

Mr. McCray testified that Respondent had fulfilled the contract and contended that Complainant did not qualify for the Fund. When asked if he had additional information and/or evidence for the Tribunal’s review, he responded negatively.

In closing, Respondent stated that Mr. Terry McCray, Qualifying Party, was ninety years old and did not appear at the prior hearing for that reason.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Ariz. Rev. Stat. § 32-1132.01(B) provides, in pertinent part, as follows:

An award from the residential contractors' recovery fund may not exceed the actual damages suffered by the claimant as a direct result of a contractor's violation. Actual damages:

1. May not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines.

2. Must be established by bids supplied by or the value of work performed by a person that is licensed pursuant to this chapter if the person is required to be licensed pursuant to this chapter.

In this case, Respondent requested a hearing challenging the Fund payout, and consequently, Respondent bears the burden of establishing by a preponderance of the evidence that the proposed award is improper or contrary to law.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”

A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force.”

Respondent had an opportunity to correct the faulty work following the Written Directive from the Registrar and failed to do so. Furthermore, it is undisputed that Respondent did not appeal the first ALJ decision issue and consequently failed to plead its case on the Workmanship Complaint.

After review of all the evidence, the Tribunal concludes that Respondent has not sustained its burden to establish by a preponderance of the evidence that the proposed award is improper or contrary to law. Complainant is eligible for an award from the Fund and the award proposed by the Fund accurately reflects Complainant’s actual damages. Accordingly, Complainant is entitled to a payout from the Fund in the amount of $30,000.00.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order, Complainant receive a payout from the Residential Contractors’ Recovery Fund in the amount of $30,000.00.

In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be forty (40) days from the date of that certification.

-54864001

001

-137160-45720000Done this day, «Today: July 4, 1996».

/s/ «Professional Full Name»

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

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By: OAH Staff